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transferred to Elmira. Considering this and anticipated operational savings from the consolidation, we cannot foreclose the possibility that continued service at Elmira will be profitable.

We conclude that a public demand, constituting a reasonable request for transportation under section 1(4), has been demonstrated for continued TOFC service at Elmira, N.Y., and that cancellation of these rates by ConRail is unjust and unreasonable, and constitutes an unreasonable practice.

Upon complaint, we find that ConRail's cancellation of TOFC rates at Elmira, N.Y., is unlawful.

COMMISSIONERS MURPHY, BROWN and HARDIN concur in the result.

It is ordered, That Consolidated Rail Corporation be, and it is hereby, notified and required to restore TOFC rates and services at Elmira, New York on or before February 15, 1977, upon not less than 5 days' notice to this Commission and to the general public by filing and posting in the manner prescribed by the Commission under section 6 of the Interstate Commerce Act.

It is further ordered, That this proceeding be, and it is hereby, discontinued.

355 I.C.C.

EX PARTE No. 261 (SUB-NO. 1)

IN THE MATTER OF TARIFFS CONTAINING JOINT RATES AND THROUGH ROUTES-FREIGHT FORWARDERS AND NONVESSEL OPERATING COMMON CARRIERS BY WATER (NVO)

Decided February 14, 1977

1. Freight forwarders have no statutory authority to establish and participate in joint rate international through route tariffs.

2. Rail, motor, or part III water carriers are precluded, as a matter of policy, from entering into international joint rates with nonvessel operating water common carriers.

John R. Attanasio, Peter T. Beardsley, George F. Begnal, Jr., Lawrence Berman, Jacob P. Billig, Nelson J. Cooney, Robert S. Davis, Raymond P. De Member, Abraham A. Diamond, R. Frederic Fisher, Robert J. Gill, Robert W. Ginnane, Stanley I. Goldman, Leonard G. James, Robert L. James, Ernest H. Land, Howard A. Levy, Raymond A. Martin, Patrick McEligot, Thomas F. McFarland, Jr., Giles Morrow, David C. Nolan, G. B. Perry, Todd A. Peterman, Ann M. Pougiales, George A. Quandrino, Edward D. Ransom, Bryce Rea, Jr., Tibor Salay, Peter G. Sandlund, Gordon M. Shaw, Stanley O. Sher, John MacDonald Smith, Harold E. Spencer, George F. Strange, Gerald H. Ullman, Charles F. Warren, and Alan F. Wohlstetter for interested parties.

REPORT AND ORDER OF THE COMMISSION

BY THE COMMISSION:

This proceeding was instituted by Notice of Proposed Rulemaking and Order served July 29, 1975, to consider the possible application of 49 CFR 1300, 1307, and 1308 to the intermodal operations of freight forwarders and nonvessel operating water common carriers (NVO's) between points in the United States and points in foreign countries. In Ex Parte No. 261, the Commission revised its tariff rules pertaining to export and import traffic with a view to allowing the filing of joint rates between rail, motor, or part III water common carriers, on the one hand, and on the other, ocean going

common carriers operating in foreign commerce. The prior reports in that proceeding, 337 I.C.C. 625, 341 I.C.C. 246, 346 I.C.C. 688, 350 I.C.C. 361, and 351 I.C.C. 490, did not decide the issue of whether the changes made in Ex Parte No. 261 should also apply to freight forwarders and NVO's.

The order instituting this proceeding presented two questions. The first is whether freight forwarders have statutory authority to establish joint rates with ocean common carriers engaged in foreign commerce. If this question is answered answered affirmatively, the Commission must then consider whether, as a matter of policy, freight forwarders should be allowed to participate in international joint rates. Similar issues must be resolved with respect to participation by NVO's in international joint rates. As discussed below, we find that freight forwarders have no statutory authority to establish joint rates with ocean carriers. We also find that as a matter of policy, rail, motor, or part III water carriers should be precluded from entering into international joint rates with NVO's. Our conclusion with respect to freight forwarders is based upon an analysis of the relevant statutory provisions and the legislative history of the Interstate Commerce Act. It is our opinion that specific authority must exist before carriers regulated by this Commission may enter into international joint rates. The initial report in Ex Parte No. 261 (337 I.C.C. 625), discussed the specific provisions of the act which allow rail, motor, and part III water carriers to establish international joint rates with ocean carriers. We have searched part IV of the act in vain for any provisions which could reasonably be interpreted as conferring similar authority upon freight forwarders. Although it has been contended that section 402(a)(6), when read in the light of section 6(12), provides the requisite authority, we reject this argument.

Prior to 1940, section 6(12) applied only to railroads. In that year, Congress amended the section to make it applicable to "any common carrier subject to this Act" (54 Stat. 910). The amendment expanded the section to include part II motor carriers and part III water carriers. Thereafter, in 1942, part IV was enacted; and it was not until 1950 that section 402(a)(5) was amended to refer to a freight forwarder "as a common carrier." There is nothing in the 1950 legislative history to show that Congress intended, by labeling a freight forwarder "a common carrier," to have section 6(12) apply to forwarders or to allow forwarders to establish through routes and joint rates with any other carriers. In fact, the legist lative history tends to show the contrary. First, Congress did not intend to have

forwarders establish through routes and joint rates with other I.C.C. carriers; in this connection, the House Report states:'

Certain objections were raised in the hearings to the first section of the bill on the ground that declaring freight forwarders to be "common carriers" would permit the establishment of joint rates between them and other types of carriers subject to the Interstate Commerce Act. On this question it is sufficient to point out that no class of common carrier subject to the act has authority to enter into joint rates with other common carriers of the same class or of any other class unless authority to do so is specifically granted in the act. After the enactment of the amended bill here reported, no authority will exist for joint rates between freight forwarders and other carriers except to the extent, and for the limited period, permitted under section 4(2) of the bill, as amended.

Second, the forwarders themselves admitted that adding the words "as a common carrier" would not change their relationship with any other carriers, except motor carriers in the limited manner provided under section 409. Thus, they seemed to concede that the new language would not permit through routes and joint rates even with carriers outside I.C.C. jurisdiction."

Thus, section 6(12) appears inapplicable to freight forwarders. Even if section 6(12) were interpreted to encompass freight forwarders, its antidiscrimination provisions could only apply if another section of the act authorized freight forwarders to enter into joint rates in the first instance. As noted above, unlike the provisions of parts I, II, & III which specifically authorize the entry into joint rates by rail, motor, and water carriers subject thereto, we can find no such provision in part IV of the I.C. Act. On the contrary we have concluded in Freight Forwarder Investigation, 339 I.C.C. 711 (1971), that freight forwarders lack such authority and have so advised Congress. Although we have recommended to Congress that the act be amended to grant freight forwarders limited authority to enter into agreements with railroads comparable to those they are authorized to enter into with motor carriers (which fall far short of a joint rate arrangement)3, Congress has consistently rejected even this limited expansion of freight forwarders authority. Similarly, the courts have repeatedly found that freight forwarders are shippers in relation to the underlying carriers, and that therefore

'H. Rep. No. 2489, 81st Cong., 2d Sess., pp. 8-9 (1950).

'Hearings on H.R. 5967 Before a Subcomm. of the House Comm. on Interstate and Foreign Commerce, 81st Cong., 2d Sess., at 65, 97-98 (1950).

See also Hearings on S. 2113 Before the Senate Comm. on Interstate and Foreign Commerce, 81st Cong., 1st Sess., at 33, 38, 52 (1950) (testimony of Giles Morrow).

"Freight forwarders, unlike other modes, may not even enter into joint rates among themselves, except in the limited situations covered by section 404 of the act.

they are precluded from entering into joint rates with other carriers. Chicago, Milwaukee, St. Paul & Pac. R. Co. v. Acme Fast Freight, Inc., 336 U.S. 465, 476-80 (1949); Acme Fast Freight Application, 8 M.C.C. 211 (1938); affirmed sub nom., Acme Fast Freight, Inc., v. United States, 30 F. Supp. 968 (S.D.N.Y. 1940), affirmed per curiam, 309 U.S. 638 (1940); United States v. Chicago Heights Trucking Co., 310 U.S. 344, 351-353 (1940); Great No. Ry. v. O'Connor, 232 U.S. 508, 514 (1914).

Accordingly, we must conclude that freight forwarders are without statutory authority to enter into joint rates not only with carriers subject to our regulatory jurisdiction, but also with water common carriers subject to regulation by FMC whether VO or NVO. Having reached this conclusion, we need not consider the policy aspects of this issue.

We view the issues with respect to NVO's somewhat differently. Ex Parte No. 261 allowed carriers regulated under parts I, II, and III of the act to establish joint rates with vessel operating water common carriers (VO's) engaged in foreign commerce. The Federal Maritime Commission's (FMC) definition of common carriers by water includes both VO's and NVO's. The FMC's definition, however, does not end our inquiry in this proceeding.

It appears to us that NVO's possess the same legal and economic characteristics as freight forwarders, and that therefor as a matter of law they stand on no better footing than freight forwarders with respect to authority to enter into joint rates with other common carriers. Cf. Acme Fast Freight Application, supra, United States v. Chicago Heights Trucking Co. supra, Chicago, M. St. P. & Pac. R. Co. v. Acme Fast Freight, supra, and Great No. Ry. v. O'Connor, supra. We need not decided this issue, however, for on policy grounds we find that ICC carriers should not be allowed to establish joint rates with NVO's.

Our conclusion on this question rests upon considerations related to our ability to enforce the Interstate Commerce Act. First, because the FMC imposes no restrictions on who may become an NVO, part IV freight forwarders could become NVO's simply by filing a tariff with the FMC. Were we to extend the tariff rules amended by Ex Parte No. 261 to NVO's, freight forwarders acting as NVO's could establish joint rates with ICC regulated carriers and circumvent the long established rule against such joint rates. Secondly, allowing NVO's to establish joint rates with ICC regulated carriers would allow an NVO to engage in freight forwarding in the United States without a certificate from this Commission in

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